Expert: Dick Dennis - 6/25/2006

Question
I live in Maryland and am looking to buy a house in Florida to be closer to my family. What are the steps I need to take.  I already found the house I like and a realtor is coming to my house to discuss issues with us on Tuesday, but I am not sure of all the things we need to do. The other issue is, we have a rental property that we are not ready to sell until Feb 07' when the lease is up for renewal.  What happens if we sell the house we live in and wait till next year to sell the rental house, but move within the next few months.

Answer
There is nothing wrong with selling your rental house as an investment property NOW, Linda. You merely promote it just as what it is . . . an income property. Plus the buyer has the option of moving into it as a residence if they so choose. Just find a good income property broker to work on it. If you get the right income property broker, you just might be able to make a tax-deferred exchange (IRC 1031). That way you could exchange for an income property down near where you want to move in Florida.

Please do not be mislead. All real estate brokers are not knowledgeable in making a tax-deferred exchange. And they are not all knowledgeable on how to promote it to the right market. You just might be able to find the right broker to handle both of your houses and help you with your FL housees, too.

Of course, I do not know the qualifications of your Tuesday Realtor, but please make sure that person is verrrrry knowledgeable. It wouldn't hurt if you interviewed another experienced Realtor or two to get a better idea what you are getting into in trying to sell two and buy one or sell two and buy two. Also, please be aware that the rental house is going to be taxed as a gain by the IRS if you do not make a tax deferred exchange. You needn't worry about that for your residence home. You have up to $250,000 of free tax gain for you and another $250,000 for your husband if you file your taxes jointly.

I do wish you well.

Dick Dennis
www.oldproblemsolver.com